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FINMA Penalizes Swiss Bank over Money Laundering of $78 Million

The Swiss regulatory authority, FINMA, initiated a lawsuit against the senior management at Julius Baer, a Switzerland-based private banking group. The prosecution was filed against two former CEOs of the bank on Thursday, keeping their identity confidential. The allegations possibly point towards Boris Collardi and Bernhard Holder, which are now partners with Pictet – an independent wealth management group – since they confirmed receiving written notices. 

The Swiss regulator, in a statement on previous executives, asserted, “Although mistakes were made in the case of the two reprimanded managers, there are not sufficient indications of direct, causal responsibility for the serious violation of supervisory law.

FINMA, according to its more rigorous sanction, can ban an entity or individual from working in the financial sector for a time of five years. Last year, Julius Baer faced the music for widespread failings in their corporate financial system. The regulator alleged former executives of laundering more than $78 million to a Venenzualen customer in 2014. 

Being the third-largest bank in the country, criticism from FINMA took a toll on its global repute and market value. FINMA appointed an external auditor to look into the company affairs, and ensure Anti Money Laundering requirements are met. 

Apart from the former CEOs, FINMA indicated potential proceedings in the future against other personnel at Julius Baer as well. A spokesperson from the bank stated that the problem coincides with previous employees of the organization who are not here anymore. The Swiss bank contributed $80 million to make up for penalties and fines resulting in the agreement on the  FIFA corruption case. On February 1, 2021, Julius Baer will update FINMA on the improvements it has made in its annual report. 

 A Julius Baer official shared his concerns about the former CEO, “We have full confidence in his work at Pictet.” Collardi in a statement said, “I accept the reprimand that has been issued. The key is that this decision now brings this matter to a close for me.”